In a bid to crack down on value-added tax (VAT) avoidance, HM Revenue & Customs (HMRC) has amended VAT rules to fall in line with new laws for overseas online retailers.
The new changes will affect:
- Overseas sellers providing goods already in the UK at the point of sale, to UK consumers through an ‘online marketplace’ (such as eBay, Amazon etc).
- UK VAT representatives acting on behalf of overseas sellers.
- Any online marketplace which allows overseas sellers to operate in such a manner.
Reports have suggested that the changes will grant HMRC new powers to tackle overseas businesses and online sellers that do not comply with UK tax rules – in a move which the tax authority believes will help to ‘level the playing field’ for all businesses.
Under the changes, HMRC will also be able to: “hold an online marketplace jointly and severally liable for the unpaid VAT of an overseas seller trading goods in the UK via that online marketplace,” according to reports.
HMRC has updated the public document VAT Notice 700/1: should I be registered for VAT? to inform the public of the changes.
The full document can be accessed here: https://www.gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat/vat-notice-7001-should-i-be-registered-for-vat